Messari researcher: Trading US stocks with Perp DEX, the next new blue ocean

null Author: Sam Translated by: Deep Tide TechFlow Key Insights:

Stock perpetual contracts still belong to a high-potential but unverified field, with limited appeal in the on-chain market, mainly due to audience misalignment, weak demand, and more popular alternatives (such as 0DTE options).

For example, the daily average trading volume of stock perpetual contracts on the Ostium platform is only $1.8 million, while the trading volume of cryptocurrency perpetual contracts reaches as high as $44.3 million, indicating weak market demand.

This may imply that market demand has not yet been fully unleashed due to infrastructure and regulatory constraints. Hyperliquid's recent HIP-3 upgrade provides the best opportunity for perpetual contracts on stocks, but the adoption process is expected to be gradual.

Source: Messari (@0xCryptoSam)

Stock perpetual contracts are regarded as the inevitable next blue ocean for on-chain markets, but current data indicate that breakthroughs in this area are difficult to achieve in the short term. Ostium, as a decentralized exchange focusing on real-world assets (RWAs), has an average daily trading volume of only $1.8 million for stock perpetual contracts, while the trading volume for cryptocurrency perpetual contracts reaches $44.3 million, reflecting weak demand.

This gap mainly stems from a misalignment of audiences. On-chain traders have little interest in stocks, whereas off-chain platforms like Robinhood allow traders to easily trade stocks and options but do not offer perpetual contracts. International investors may become a potential target group, as they cannot directly access the U.S. stock market. However, these investors may prefer to directly hold stocks to gain shareholder rights while avoiding funding fees and settlement risks.

Compared to tokens, stocks face fewer interoperability challenges, while tokens benefit from the convenience of synthetic packaging. For ordinary investors, almost every stock in the global market has been abstracted through individual stock codes in the search bar. Therefore, although perpetual contracts add permissionless and censorship-resistant characteristics to stocks, ordinary stock investors are either unaware of this or simply uninterested.

The most likely users of stock perpetual contracts are retail options traders (who account for 50%-60% of 0DTE trading on the Robinhood platform). However, traditional exchanges that rely on banking services will only adopt stock perpetual contracts when the law is clear. The U.S. Commodity Futures Trading Commission (CFTC) has approved perpetual contract trading for BTC and ETH, but these two have been determined to be non-securities. Although perpetual contracts are more intuitive than options, the popularity of stock perpetual contracts may be slower than expected due to the close connection between retail adoption pathways and legal clarity.

Source: @Kaleb0x

Let's explore the potential development direction of stock perpetual contracts in the context of the HIP-3 upgrade at Hyperliquid. HIP-3 introduces a permissionless perpetual contract market, and data shows that less than 10% of Hyperliquid addresses have bridged to Aster, Lighter, and edgeX, with even fewer users choosing multiple decentralized exchanges (DEXs) for perpetual contracts. This indicates that the capital in Hyperliquid is sticky and of high quality. Based on this data, the future of stock perpetual contracts can be predicted from two perspectives:

Hyperliquid users are loyal to the platform; regardless of the asset list or features, they prefer to choose Hyperliquid over other perpetual contract DEXs.

Hyperliquid users are satisfied with the current perpetual contract market products.

I believe both viewpoints have merit. Considering that Hyperliquid users have not significantly shifted funds in response to incentives, they may be loyal to Hyperliquid. However, since most of the trading volume and open interest on Hyperliquid is concentrated in mainstream assets, similar to other perpetual contract DEXs, it is currently difficult to determine whether Hyperliquid users care about market diversity, and whether stock perpetual contracts are attractive to ordinary users (more importantly, to the large holders who have 70% of the open interest on Hyperliquid).

In addition, these traders may also have accounts on traditional exchanges and brokerage platforms, which further limits the potential market size for stock perpetual contracts on Hyperliquid.

It is important to note that perpetual contracts for stocks may not bring new open contracts or trading volume to Hyperliquid, but may instead divert existing trading flow.

Although Ostium (with an annual perpetual contract trading volume of $22 billion) and stock tokenization tools (such as xStocks, which has a spot trading volume of $279 million) have not yet achieved explosive growth, this may reflect limitations in infrastructure rather than a lack of potential demand. This pattern is similar to the early growth trajectory of perpetual contracts. GMX demonstrated that there is demand for on-chain perpetual contract markets, but the infrastructure at that time could not support sustained trading volumes. Hyperliquid has addressed this bottleneck, releasing potential demand. Following the same logic, stock perpetual contracts may find their first scalable product-market fit on Hyperliquid after HIP-3 provides the necessary performance and liquidity. Although current data cannot confirm this outcome, this precedent is worth noting.

The long-term potential of stock perpetual contracts is still evident compared to 0DTE options. Projects like Trade[XYZ] can leverage regulatory arbitrage to build an early user base before entering the market on traditional exchanges. However, the real challenge lies in attracting off-chain retail traders, which has always been difficult for crypto applications.